Businesses voice fear over "ticking time bomb" of social media

A new study of 500 UK businesses has revealed the extent to which social media are viewed as a "ticking time bomb", with three-quarters of firms flagging up negative content as their biggest single problem online.

More than half (52 per cent) of those questioned by OnePoll for reputation management firm Igniyte said they had suffered from poor reviews, malicious comments or damaging social media posts.

The report claims businesses that reported negative online sentiment said it cost them an average of nearly £47,000 in lost sales and company value every year. If extrapolated to the UK’s three million active companies, the total cost to British business could be as high as £70bn a year.

As a result, one in five said "fire fighting" was now the focus of their entire online strategy – ahead of gaining followers and sales.

"Negative comments online have a disproportionately damaging effect. We have found that just two or three negative reviews can reduce click-throughs by between 15 and 39 per cent," says Simon Wadsworth, MD of Igniyte.

He describes social media as "a huge ticking time bomb for businesses".

"It’s a 24/7 activity that requires proper resourcing otherwise it can seriously backfire. Yet many companies don’t think it through properly. The time to prepare to deal with negative comments is before, not after, they have happened."

If the Igniyte report is to be believed, managing reputation online is a major issue for business. It highlights the problems that the internet and social media have brought for businesses, for which online commerce imposes significant costs in the short term while the benefits, if any, accrue in the long term.

The research also provides insight into the ruthless nature of competition online. Some 43 per cent of respondents complained about negative comments created by competitors.

And it revealed the danger posed by unhappy employees. Malicious postings from disgruntled former employees affected 42 per cent while almost a third (30 per cent) thought their online reputation had been adversely affected by the online activity of existing employees. Poor reviews caused problems for 41 per cent of businesses, according to the survey.

And while there is growing awareness in business of the importance of maintaining a positive online profile, the report also found that many UK companies fail to take effective action in support of their reputation.

Forty-five per cent of those asked said they had tried and failed to remove damaging posts, with more than a third (36 per cent) attempting to engage with critics themselves.

Another 12 per cent wanted to take action but did not know where to start. Only a third of bosses felt they had all the skills they needed to keep their company’s online reputation up to scratch, with one in ten admitting they had no idea how to protect themselves.

Yet, when approached by PRWeek, both the Confederation of British Industry and the Federation of Small Businesses said they had not even considered the question and had no expertise or advice in that area.

According to Wadsworth the problem is most acute in the entertainment and travel sector, which depends on the internet for bookings and is particularly susceptible to bad reviews.

Shakila Ahmed, comms director of the UK’s second largest budget hotel brand Travelodge, agrees that online reputation management is a major issue for her company.

"If you are dabbling online you have to have a level of commitment that will allow you to provide proper customer service and respond in a timely manner to comments," she says.

Ahmed adds responsibility for monitoring online reviews is devolved throughout the organisation: "All our managers monitor TripAdvisor. We have a structure that allows us to speak to them [managers] regularly, to find out what went wrong in the case of a bad review and what they have done to put it right."

The company also has a staff intranet forum that allows them to express their concerns in private, before they become publicly damaging to the company.

James Brooke, MD, of digital comms agency Rooster PR, says negative content tends to become a problem only when companies fail to engage wholeheartedly with social media: "They can be beneficial but only if you commit 100 per cent. If you can't do that, you are probably better off not doing it at all."

But he says firms should not panic about the odd rogue review: "This is not a black and white issue. Today’s consumer is smart and savvy so they can see beyond one or two bad comments."